Article 8 (2) IBA Rules 2020 (Evidentiary Hearing)

Considering the worldwide restrictions caused by the COVID-19 pandemic which widely affected international arbitration proceedings, it is no surprise that the IBA Rules 2020 provide for a framework for remote hearings. The IBA Rules 2020 define ‘remote hearing’ as a hearing conducted, for the entire hearing or parts thereof, or only with respect to certain participants, using teleconference, videoconference or other communication technology by which persons in more than one location simultaneously participate.

According to Article 8 (2) IBA Rules 2020, the arbitral tribunal, at the request of a party or on its own motion, and after consultation with the parties, may order that the evidentiary hearing be conducted as a remote hearing. Pursuant to the commentary on Article 8 (2) IBA Rules 2020, the arbitral tribunals shall be proactive and consider time, cost and environmental concerns when assessing whether the evidentiary hearing should be conducted remotely.

In the event of a remote hearing, the arbitral tribunal shall consult with the parties to establish a protocol to conduct such a hearing efficiently, fairly and, to the extent possible, without unintended interruptions. The protocol may address the following topics: (i) the technology to be used (which should be saved and ensure sufficient quality of transmission) and a fallback plan in case the quality of the used technology becomes insufficient during the hearing; (ii) advance testing of the technology or training in the use of the technology; (iii) the starting and ending times considering, in particular, the time zones in which participants will be located; (iv) how documents may be placed before a witness or the arbitral tribunal; and (v) measures to ensure that witnesses giving oral testimony are not improperly influenced or distracted (cf. article 8 (2) IBA Rules 2020). In particular, the last point may lead to discussions among the parties and in some instances also the arbitral tribunal. To ensure that witnesses are not improperly assisted by other persons or making improper reference to documents when giving oral testimony, the commentary of the IBA Rules 2020 suggest several methods include questioning the witness at the outset of the examination about the room in which the testimony is being given, the persons present and documents available; installation of mirrors behind the witness; use of fish-eye lenses; or the physical presence with the witness of a representative of the opposing counsel.

Since the provision leaves open the question of who will prepare the remote hearing protocol, either the parties or the arbitral tribunal may do so. Where the parties do not agree on the content of the protocol, the commentary of the IBA Rules 2020 provides that the content will be fixed by the arbitral tribunal after consultation with the parties.

Whether the arbitral tribunal has the power to order a remote hearing against the will of a party depends on whether a right to a physical hearing exists under the applicable lex arbitri or whether the agreed arbitration rules grant the arbitral tribunal discretion with regards to the format of the hearing (see for example Article 26 (1) of the ICC Rules 2021).

Today, despite many concerns at the outset, we may state that since the COVID-19 crisis has started, virtual hearings have proven to be an effective means to conduct arbitral proceedings. Major arbitration organizations such as the ICC, SCAI, LCIA, SCC, HKIAC and others are promoting them. Hearing protocols have become a standard means to govern the details of such proceeding. Service providers have specialised in providing and managing virtual hearing platforms, including live transcripts. In our opinion, we may say that the IBA Rules 2020 just were published in due time and in this respect are “riding the tide”, so to speak.

Article 2 (2) lit. e IBA Rules 2020 (Consultation on Evidentiary Issues)

In practice, cybersecurity has become a significant concern for parties due to the high sensitivity and commercial value of documents exchanged in arbitration proceedings, especially in the context of the filing of written submissions (including their annexes), document production and the presentation of evidence. Article 2 (2) lit. e IBA Rules 2020 provides that the evidentiary issues on which the arbitral tribunal may consult the parties include treating any issues of cybersecurity and data protection. This new provision emphasizes, in light of the EU's General Data Protection Regulation, the advisability to consider and regulate data protection issues, including data privacy and cybersecurity, already at an early stage in an arbitration proceeding. The commentary on the IBA Rules 2020 refers to further resources that parties and tribunals may find helpful in considering these issues, such as the ICCA-IBA Roadmap to Data Protection in International Arbitration and the ICCA-NYC Bar-CPR Protocol on Cybersecurity in International Arbitration. In particular, the ICCA-IBA Roadmap provides arbitration users with an extensive overview of arbitration-related data protection issues and includes a number of useful templates and checklists to deal with these issues in practice.

Article 3 IBA Rules 2020 (Documents)

Article 3 IBA Rules 2020 introduces inter alia the following changes:

• A party having requested the production of documents may respond to an objection from the relevant counterparty if so directed by the arbitral tribunal and within the time so ordered (Article 3 (5) IBA Rules 2020). This new provision reflects the well-established practice of arbitral tribunals to allow parties to respond to the other party’s objections to document production requests.
• In Article 3 (7) IBA Rules 2020, the phrase "in consultation with the Parties" was deleted to clarify that there is no need for the arbitral tribunal to consult with the parties when considering a "Request to Produce". The Parties had their saying, and now it is for the arbitral tribunal to decide. This change, too, reflects well-established practice.
• Article 3 (12)(d) IBA Rules 2020 newly stipulates that documents produced in response to a document request do not have to be translated into the language of the arbitration proceedings. This contrasts with Article 3(12)(e) which provides that any document submitted in an arbitration proceeding must, in principle, be translated into the language of the arbitration. The IBA Rules 2020 do not address whether documents to be translated may be translated in part only. For clarification purposes, this issue is often dealt with in the procedural rules such as the Term of References or the Procedural Order No. 1, which may state that documents in a language familiar to all parties (usually enumerated in the rules) do not need to be translated, or only as far as the part relevant to the arbitration is concerned.

Article 4 (6) IBA Rules 2020 (Witnesses of Fact)

Article 4 (6) of the IBA Rules 2020 was amended to clarify that second-round witness statements may address new factual developments, whether or not referred to in another party's earlier submissions, given these new factual developments could not have been addressed in a previous witness statement. Although this principle reflects the idea of frontloading arbitration proceeding, in our experience, in practice, it is rarely applied in a strict way: Arbitrations often evolve over time and depending on how the other party (or parties) reply to a certain writ, amendments of the factual allegations are needed.

Article 5 (3) IBA Rules 2020 (Party-Appointed Experts)

Article 5 (3) of the IBA Rules 2020 was amended similarly. This provision allows parties to submit a second round of rebuttal expert reports. However, these rebuttal reports are limited to responses to matters contained in another party’s witness statements, expert reports or other submissions that have not been previously presented in the arbitration proceeding or new developments that could not have been addressed in a previous expert report. According to the commentary on the IBA Rules 2020, considerations of efficiency (frontloading) and good faith weigh in favour of giving a party a single opportunity to present its arguments and allowing additional opportunities only when it was not possible to make those arguments at the time. However, in practice, the same applies as what we wrote in the previous paragraph.  

Article 9 (3) IBA Rules 2020 (Admissibility and Assessment of Evidence)

Finally, Article 9 (3) was a newly inserted into the IBA Rules 2020. It provides that the arbitral tribunal may, at the request of a party or on its own motion, exclude evidence obtained illegally. This primarily includes documents obtained via cybersecurity breaches and leaks. A further example is the recording of a conversation without the permission of those involved in a country where such an act is illegal. However, there is no consensus on what standard should be applied in order to determine whether evidence has been illegally obtained. This might lead to issues especially in international arbitration proceedings involving different legal systems, as national legislations on the admissibility of illegally obtained evidence vary. Under the IBA Rules 2020, the mere fact that evidence was obtained illegally does not automatically lead to the exclusion of the concerned evidence. Rather, this decision is reserved for the arbitral tribunal. The commentary on the IBA Rules 2020 provides criteria that arbitral tribunals may take into account. Such criteria are, among others, whether the party offering the evidence was involved in the illegality, considerations of proportionality and whether the evidence is material and outcome-determinative, whether the evidence has entered the public domain through public leaks, and the clarity and severity of the illegality.

Conclusion

In conclusion, the IBA Rules have not changed fundamentally. The few material changes reflect well-established practices and recent developments, such as the trend from physical towards remote hearings due to the COVID-19 pandemic, and the need to consider issues of cybersecurity and data protection. In particular, the introduction of a framework for remote hearings will likely continue to be utilized once the pandemic is over as it facilitates more efficient and less expensive proceedings. This said, we believe that the updates will contribute to the continued popularity of the IBA Rules 2020 in international arbitrations.